Questerre Energy Corporation Class A · TSX:QEC
Questerre Energy Corporation Class A — Investor Presentation (September 2013)
36 slides from Questerre Energy Corporation Class A's investor presentation, September 2013
Slide 1: Corporate Presentation September 2013
Slide 2: Company Strategy
1. Company Strategy 2. Light Oil Bakken/Torquay, Antler, Saskatchewan 3. Liquids-Rich Montney, Kakwa-Resthaven, Alberta 4. Oil Shale 5. St. Lawrence Lowlands, Quebec 6. Outlook
Slide 3: Leverage tight rock expertise to acquire tight resources early and develop reserves
Leverage extensive tight rock/shale rock expertise to acquire tight resources early and develop reserves • First mover in shale gas –acquired acreage in Quebec almost 5 years ahead of industry • Invited speakers at domestic and international conferences and authors of technical papers • All Questerr
Slide 4: Portfolio to create value in the short, medium, and long term
Portfolio to create value in the short, medium, and long term
Slide 5: Portfolio overview by region
Southeast Saskatchewan Proven Bakken/Torquay tight oil production with strong netbacks Western Alberta Liquids-rich Montney natural gas resource play with exceptional economics Utah & Wyoming Oil shale commercialization project in Utah with Total S.A. and Red Leaf Early stage oil shale project in Wy
Slide 6: Operating and Financial Results; Capitalization and Liquidity
Operating and Financial Results Capitalization and Liquidity For the 3 months ended June 30, 2013 All financial amounts in C$
Slide 7: Light Oil Bakken/Torquay, Antler, Saskatchewan
Slide 8: Established tight oil asset targeting Bakken/Torquay resource play
Established tight oil asset targeting Bakken/Torquay resource play High value reserves Sweet Spot NPV-10/bbl of $38.27/bbl based on 2P reserves of 1.9 million barrels and $75.3 million NPV-10 as at December 31, 2012 2013 YTD netbacks of ~$67/bbl based on $91/bbl realized oil prices • Average royalti
Slide 9: Waterflood potential at Antler
Questerre Pool Secondary recovery scheme has been successfully applied in adjacent Bakken/Torquay pool in Manitoba with a projected increase in recovery from Adjacent Pool 9% to between 16% - 24% • Low energy reservoir (very limited gas/water drive) at Antler makes it an ideal candidate for waterflo
Slide 10: Waterflood potential at Antler: production profile
Questerre Pool Secondary recovery scheme has been successfully applied in adjacent Bakken/Torquay pool in Manitoba with a projected increase in recovery from Adjacent Pool 9% to between 16% - 24% • Low energy reservoir (very limited gas/water drive) at Antler makes it an ideal candidate for waterflo
Slide 11: Kakwa-Resthaven
Slide 12: 2,500 boe/d discovery well creates new core area in west central Alberta
2,500 boe/d discovery well creates new core area for Questerre in west central Alberta • Montney play is approximately 500 km long by 90 km wide • One of the largest oil and gas fields in world • Gas, oil and liquids- rich windows similar to Eagleford shale in Texas • Development has historically fo
Slide 13: Sweet spot of the play is overpressured, liquids-rich area
Sweet spot of the play is overpressured, liquids-rich area • High liquids, particularly condensate key to robust play economics Questerre has built a significant land position in the sweet spot of this fairway • Acquired 72 gross sections with a ~90% working interest (58 net sections) • Good tenure-
Slide 14: Montney offsetting well test results
1. Paramount (Karr-Gold Creek) 16. Celtic (04-22) 13.4 MMcf/d + 670 bbl/d 11.7 MMcf/d + 362 bbl/d 2. NuVista (02-01) 17. Celtic (02-07) 10.0 MMcf/d + 500 bbl/d 10.2 MMcf/d + 437 bbl/d 3. 7G & Celtic (01-29) 18. Cequence (13-09) 4.7 MMcf/d + 1,209 bbl/d 3.2 MMcf/d + 140 bbl/d 4. Celtic (03-28) 19. Ce
Slide 15: First three wells tested at 2,500 to 1,800 boe/d
Wellhead Condensate Rate – bbls/MMcf First three wells have tested at rates of 2,500 to 1,800 boe/d with over 40% condensate Liquids rates from first wells have averaged 140-190 bbls/MMcf over 2013 Economic Sensitivities • Gas production has been constrained by lack of facilities – compression and l
Slide 16: Industry activity: ExxonMobil buying Celtic
Ney Jen” INDUSTRY ACTIVITY See oa ati Exxonobil Buying Celtic For $3.1 Billion In Rare Western Cenada Acquisition yaks ‘eS dca se ya ceo aati a Ca Resthaven ‘ent taobl Cootnienca noite pe san en mee temon dl capanen - Montney Kats or, yt tn ct wings ete mei pers not ae eit itr Ecard. pe abl Caan sin
Slide 17: Industry activity: Paramount expanding capacity
INDUSTRY ACTIVITY Paramount Musreau/Resthaven Montney Paremount Expanding Capacity To Handle Three Times Current Company Output Lands pace : Se in nee unebvanen cies Enurgy Group Spent seas aaet q (anc a fg ag Cope Pt ag ted ty By PatRoche Paramount Resources Ltd's processing capacity will total 73,
Slide 18: Industry activity: NuVista equity financing
INDUSTRY ACTIVITY Compelling Economics Now \S DAILY OIL BULLETIN aon om ... With line-of-sight to exceptional he Oates Ala eth Eton anew vai Prato Danek here te oy NuVista Announces $95 Million Equity Financing; Expanded Wapiti Montney Capital Program NuVista Announces $95 Million Equity Financing;
Slide 19: Wells targeted upper two prospective intervals in the Montney
Questerre wells have targeted upper two prospective intervals in the Montney • Industry reported results from other interval indicates they are just as productive • Partners reported offsetting well tested at 100 bbls/MMcf from upper interval in Montney • Further potential exists in lower Montney •
Slide 20: 130 million boe contingent and prospective resources assigned
130 million boe in contingent and prospective resources have been assigned to two intervals on approximately one third of Questerre’s total acreage • NPV-10 for contingent resources estimated at ~$9 per barrel • Contingent resources classified based on 3-mile distance from producing or tested Montne
Slide 21: Access to customers a critical path item
New energy paradigm makes access to 140 bbl @ ~$100/bbl customers a critical path item (90%-100%+ of WTI/bbl) 5 bbl @ ~$100/bbl Questerre strategy is to secure access (90%-100%+ of WTI/bbl) to all aspects of value chain • Processing facilities for natural gas, pipelines for 15 bbl @ ~$60/bbl natural
Slide 22: Illustrative development scenario: 20 MMcf/d plus liquids
Production and cumulative cash flow Illustrative development scenario based on 20 MMcf/d + liquids of firm processing capacity Initial capital investment of $80 million-$100 million required in 2014/2015; NPV-10 $430 million with Production and net wells drilled production of ~6,000 boe/d
Slide 23: Illustrative development scenario: 40 MMcf/d plus liquids
Illustrative development Production and cumulative cash flow scenario based on 40 MMcf/d + liquids of capacity • 20 MMcf/d firm capacity and 20 MMcf/d on interruptible basis Initial capital investment of $120 million-$150 million Production and net wells drilled required in 2014/2015; NPV-10 ~$635 m
Slide 24: Plans for remainder of 2013
Participate with partners in up to three additional wells for remainder of 2013 Move up learning curve to improve drilling and completion techniques Secure development capital through asset sales or project finance Further testing on 15-01 well to prove up liquids potential (upside acreage)
Slide 25: Oil Shale
Slide 26: Major resource on cusp of commercial development
Major resource on cusp of commercial development • Estimated 2.8-3.1 trillion barrels in place worldwide with 2.1 trillion located in the United States Questerre has an indirect interest in a US$400 million joint venture with Total S.A. and Red Leaf Resources, a private company, to unlock this resou
Slide 27: Innovative approach moves the process to the rocks
Innovative approach that moves the process to the rocks instead of moving the rocks to the process • Incorporates benefits and avoids challenges of both surface and subsurface processes Dramatically improves economics • Modeling indicates economics are better than oil sands projects with similar sca
Slide 28: Pasquia Hills, Saskatchewan and Wyoming
Pasquia Hills, Saskatchewan 100% interest in ~39,000 high-graded acres at Pasquia Hills with potential for oil shale resource of over several hundred million barrels SASKATCHEWAN Wyoming Drilled 16 wells in 2012 20% interest in 5,120 acre farm-in with Red Leaf Approximately 30-45 m holding an 80% in
Slide 29: St. Lawrence Lowlands
Slide 30: Utica shale gas prospective resource and tenure
• 18 Tcf prospective recoverable resource on acreage – 4.4 Tcf net to Questerre • Premium gas market • Tenure recently extended to 2021 • Environmental assessment underway
Slide 31: Communicating benefits of development to Quebecers
• Questerre continues its work on communicating benefits of development to Quebecers • Organized second tour of Quebec farmers to Alberta with positive feedback from farmers • Debate is slowly shifting from “if” to “how” oil and gas development could happen • Initial focus is on oil • Public consult
Slide 32: Outlook
Slide 33: 2013 outlook and priorities
Implement waterflood in Antler, Saskatchewan to maximize recovery of oil in place Drill up to three more (1.30 net) wells in Kakwa-Resthaven for liquids-rich Montney shale - Four (1.55 net) wells in total for 2013 Commence field work for commercial scale capsule in Utah for year-end Prepare for rele
Slide 34: Board and Management
Board Management Les Beddoes, Jr. Michael Binnion, President & Chief Executive Officer International explorationist John Brodylo, VP Exploration (Nexen) Former VP Exploration, Bow Valley Energy Inc.; Victoria, BC Michael Binnion, President & Chief Executive Officer Peter Coldham, VP Engineering & Op
Slide 35: Forward-looking information advisory
This presentation contains certain forward–looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are in
Slide 36: Contact details
Questerre Energy — Investor Presentation (September 2013) on 6ix